PERSONAL FINANCE WRITING SAMPLES
Writing Sample #1
Credit Repair Tips
One of the first things you need to do before you start trying to fix your credit is is to learn how how credit scoring works. This article will explain this concept, so you will know what to look for when you start the credit repair process.
What is a Credit Score?
This is the score that lenders use. It is is called a FICO® score. Your FICO score helps lenders determine whether you are a good credit risk or not, and how much you'll pay in interest if you are extended a loan.
The Highs and Lows of a Credit Score
Credit scores range from a low of 300 or 400 to a high of 800 or 900, depending on the source cited. The higher your score, the better. This means you will get lower interest rates on everything from home and auto loans, to credit and department store cards. Alternately, the lower your score, the higher the interest rate.
Why It Pays to Fix Bad Credit
Bad credit costs. How? Consider this: Roughly, a score of 650 is necessary to qualify for a prime home loan at conventional rates these days. Those with lower credit scores can still get a home loan, but it will be sub-prime, which means your interest rate will be higher, and you'll have to come with a larger down payment. With good credit, lenders require a down payment of anywhere between 3 and 20 percent of the cost of the house. Those with lower credit scores may have to put down as much as 30 to 35 percent.
As an aside, before the home foreclosure crisis of 2007, the score required to get a conventional home loan was around 620 across the board. Nowadays, falling below a 650 cut-off point can impose significant costs on mortgage borrowers. Let's run some numbers to illustrate just how much bad credit costs.
Over the life of a 30-year, $150,000 mortgage for example, a borrower paying a sub-prime rate of 9.84%, instead of a prime rate of 6.56%, would pay $317,517 in interest instead of $193,450 -- a difference of $124,067 in interest payments over the life of the loan. And this is why it literally pays to clean up your credit.
Credit Repair Tips: 3 Factors that Determine Your FICO Score
There are several factors that go into determining your FICO store. Following are three of the most important:
On-Time Payments: How many times you've had late payments. FYI, this is the number one thing you can do to increase your credit score - make your payments on time.
Length of Credit History: The longer you have open credit accounts, the higher your score (if you've paid on time and if the accounts are of a certain kind).
Credit Available to You: Having too much credit available to you - even if you don't use it - can lower your score. Note: It's tidbits like this that most don't know when trying to repair their credit that can have them going about it the wrong way.
Have the Life You Deserve
The good news is that with the right help, you can repair your credit and get on the road to having the life you dream of, eg, starting a business, buying a home, upgrading to a nicer car, etc. Give us a call today. We can start raising your credit score almost immediately.
Writing Sample #2
Repairing Your Credit: Two Little-Known Tips for Dealing With Debt Collectors
If you're trying to repair your credit yourself, doing so can seem like a full-time job. But, it’s worth it, and you don't need to use a credit repair service or other paid entity to do it. One of the things that make it so difficult to do alone is dealing with debt collectors because they can be so misleading. In the words of the infamous debt-free guru, Dave Ramsey, the way to tell when debt collectors are lying is when their lips are moving.
With this in mind, following are a couple of little-known tips for dealing with these nefarious professionals that can help make repairing your credit that much easier.
Why Knowing When to Negotiate Can Save You Money
Debt collectors want you to pay up - plain and simple. This is always the end goal because like any other business, they're in the business of making money. However, you have negotiating power when it comes to settling old debts.
And, the best time to negotiate with debt collectors is at the end of the month. Why? Because most of the employees work on some type of monthly commission schedule. This means that what they are paid based on the amount of monies they've brought in during a specific month.
What this means for you when trying to repair your credit is that if you negotiate with them at or near the end of the month, you have a better chance of paying less.
When Repairing Your Credit, Record Conversations with Debt Collectors
This is the best record you can possibly have. And, you do want to have records of your interactions with collectors when trying to repair your credit because you will most like speak with several reps over the course of many weeks (and sometimes months). Many times, you will be told different things from different employees.
So, a recorded conversation can really come in handy if you ever have to go to court. And, it can also give you more negotiating power at certain points in the debt negotiation process.
Note: You should know is that just over two-thirds of U.S. states permit you to secretly record conversations. In the remaining states, you can only record a conversation with the other party's permission.
To get around this, notify the debt collector you're talking with that you will be recording your interaction with them.
This will do two things: (i) put them on notice and if they keep talking after you've told them this, then the law looks at it as them giving you're their consent (i.e., implied consent); and (ii) it may keep them from trying to take advantage of you. For, if they lie and you have proof of it in the form of a recorded conversation, you can take legal action against them.
Evergreen Tip When Trying to Repair Your Credit
Always, always, always get everything in writing. Never send money until you have some form of a written agreement outlining what you and the debt collector have agreed to (e.g., email, letter, fax, etc.).
Writing Sample #3
5 Easy Things You Can Do TODAY to Start Repairing Your Credit After Foreclosure
Starting over after foreclosure can be tough – especially if your dream is home ownership again. The AP article, Starting over after foreclosure, on Philly.com put it best, stating:
Next to filing for bankruptcy, nothing wrecks your chances of qualifying for a home loan like a foreclosure. . . That's because the mortgage-lending guidelines most banks follow prohibit them from making loans to people with foreclosure or a short sale in their credit history, often for years. Never mind the hit a credit score takes.
How does a foreclosure impact your credit? How long does a foreclosure stay on your credit report?
A foreclosure stays on your credit report for up to seven years from the date of sale. However, in spite of this, you can start to rebuild your credit almost immediately to the point where you can qualify for a mortgage again in a few years (usually around three years). You don't have to wait until the foreclosure falls off your credit report in 7 years.
Have a Foreclosure On Your Credit Report? Here's What to Do To Start Rebuilding Your Credit Immediately
1. Pay All Bills on Time: Late payments are the number one reason credit scores drop. So if you’ve filed bankruptcy and/or gone through foreclosure, this is the easiest way to start repairing your credit.
2. Get More Credit: While this may not make sense, it’s necessary, especially if you filed bankruptcy and have no open/operational credit lines. You need to have credit to prove that you are credit worthy.
How to Get Credit When You Have Bad Credit
“But,” you may be thinking, “how can I get credit if I have bad credit (eg, filed bankruptcy/gone through foreclosure)?”
Easy . . . apply for a secured credit card. After 6-18 months, the line will become unsecured if you pay your bill each month on time, and creditors won’t know that it’s a secured credit card.
3. Open Checking/Savings Account: One thing lenders look for is a “normal” banking record. So, if you don’t have a checking and/or savings account (both are ideal), you’ll be looked at as a credit risk because most people with good credit do have these things. They don’t operate outside the credit lines, eg, using places like check cashing businesses to cash paychecks; paying bills with money orders, etc.
4. Monitor and Dispute Items on Your Credit Report: Why is this important? Consider this:
Your credit report contains information about where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. [Source: How to Dispute Credit Report Errors, FTC.gov]
A Disturbing Study: Poor Disproportionately Affected by Credit Report Errors
By some estimates, up to 80 percent of credit reports contain errors. The Bankrate.com article, 80% of Credit Reports Have Errors, states:
... nearly 80% of credit reports contain some error, and at least 25% have errors serious enough to lead to loan and credit denials. Mistakes can range from misspelled names and inaccurate birth dates to listing "closed" accounts as "open", or even listing the same loan twice.
So, if credit information is being gathered and sold about you, you want it to be correct, for it impacts things like interest rate (as well as being qualified to get certain jobs).
But get this -- if you’re low-income, you’re even more likely to have errors on your credit report. Proof?
Overall, 73 percent of consumers surveyed reported having some kind of error on their credit report. The types of errors were further classified and those that could impact a consumer’s ability to qualify for credit were called serious errors. Fifty-one (51) percent of consumers surveyed showed at least one serious error on their credit report – roughly double that of national averages. [Source: Rochester's Poor Have Twice as Many Errors on Credit Reports as National Average, EmpireJustice.org]
5. Get Proactive: The main thing to keep in mind after going through a foreclosure or bankruptcy is to get proactive with your credit; monitor your reports (from all three credit bureaus; not just one); open credit lines (not too many -- 2-3 should be fine); and pay your bills on time.
Even thought it may feel like it, foreclosure is not the end of the world. It can be a whole new beginning. You can rebuild your credit -- and it doesn't take as long as you think. These tips get you well on your way.
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